An official on condition of anonymity said that most of the foreign airlines are having narrow body airplanes which are fuel-efficient and would make the national airlines expensive, if allowed in the country. They said that PIA is already very expensive as compared to other airlines for a host of factors and one of them is that national airline is massively overstaffed.
Unlike PIA, foreign airlines are fuel-efficient, operating with relatively less staff and have outsourced their non-core business activities. Thus foreign airlines with these advantages largely because of operating purely on commercial lines are expected to offer cheaper fare to passengers. The PIA management wanted the government for making it part of the aviation policy, which analysts said would be at the cost of consumers. The transformation plan submitted by the management of PIA included paradigm shift in strategy and stated that the operation cost would be minimised by reducing fuel cost through induction of efficient aircraft, discontinuation of services on loss-making routes and improvement in revenue through route rationalisation. The management sought help from the government on financial side by one time cash injection of Rs 25 billion, rollover of Term Finance Certificate (TFC) and Sukuk with ultimate liability of mark-up to be picked up by the government. The request also included conversion of Rs 8 billion government of Pakistan loans to equity and rollover and assumption of mark-up liability by government of Pakistan of $120 million loans as well as to pick up loss on socio-economic routes of Rs 400 million per year.
The management stated that reduction in non-operational areas would be done through normal attrition and human resources rationalisation (natural attrition) plan would result in a cost reduction of approximately Rs 3.8 billion over a period of 5 years. The PIA management has submitted five-year plan to the Finance Ministry for approval.